Managing Cash Flow in a Personal Injury Practice

Personal injury law firms operate on one of the most capital-intensive models in legal practice. Cases can take years to resolve, expert witness fees must be paid upfront, and disbursement costs accumulate across every active matter. For firms running dozens of cases simultaneously, the cash flow challenge is immense.

The PI Cash Flow Challenge

Unlike transactional practices where fees are earned on completion, PI firms invest heavily at the front end of every case with no guarantee of when — or if — that investment will be recovered. Expert witness fees, medical reports, court filing costs, and investigation expenses all come out of the firm's operating capital.

This creates a fundamental tension: the more successful your firm is at winning new cases, the more cash it needs to fund them. Growth actually increases short-term cash pressure, which is the opposite of how most businesses work.

"The irony of PI practice: winning more cases can create a cash flow crisis. The solution isn't to take fewer cases — it's to fund them properly."

Solutions for PI Firms

Case cost financing allows PI firms to fund disbursements without draining operating capital. The firm receives dedicated funding for case-related costs, drawn down as needed, and repaid when cases settle. This keeps the operating account healthy while allowing the firm to take on every case it deserves.

Combined with a working capital line of credit for operational expenses, PI firms can build a robust financial foundation that supports aggressive case acquisition without the constant anxiety of running short on cash.